2017-03-17

Although discounts for first-time homebuyers with good credit are still available, many Beijing banks have hiked mortgage rates to the benchmark. Second-home mortgages and those with bad credit may have to pay a 10 percent premium. Banks have also slowed their lending process.

Beijing News reporter learned yesterday from a number of banks, as real estate credit line by the control and decline, part of the bank's first mortgage interest rate is still discounted 10%, but some banks have canceled the first-home interest rate discount, returning to the benchmark interest rate, and even 10% higher.

...In this regard, Everbright Bank, Agricultural Bank of China, Bank of China, Industrial and Commercial Bank, Minsheng Bank, Shanghai Pudong Development Bank, CITIC Bank yesterday reported that the new Beijing reported that the current bank business is normal, did not stop the mortgage. Beijing News reporter visited eight bank outlets also found that the current major banks mortgage normal, but the lending rate significantly slowed down.

"Yesterday, one of the five branches of the line of a clerk clerk said that the current major bank mortgage lending rate is generally changing the number of loans, but the loan is not available, currently lending has slowed down.

A joint-stock bank loan department staff said the mortgage approval rate has not slowed down, only affected by the relevant processes, lending time has increased.

Residents of the family name in the city already has a set of housing, as well as in the city without housing but commercial housing loan records or provident fund housing loan records, the purchase of ordinary self-housing down payment ratio of not less than 60%, the purchase of non-ordinary housing down payment ratio of not less than 80%.

Beijing municipal government imposed the harshest down payment requirements in history on Friday, after previous property cooling measures failed to prevent an ongoing and frenetic home-buying spree.

Down payments for second-time “ordinary home” buyers was raised to a minimum 60 per cent, from 50 per cent before, while second-time “non-ordinary home” buyers will have to pay a minimum of 80 per cent, up from 70 per cent, according to the city’s housing and banking authorities.

The capital’s authorities introduced the distinction between “ordinary” and “non-ordinary” home on September 30. Homes larger than 144 square metres, or with a price 20 per cent higher than government-set guidelines, are defined as “non-ordinary”, and are subject to higher down payment requirement.

Most of the city’s flats developed by the private sector would be considered “non-ordinary – which covers most trade-up buyers – the minimum payment has been raised to 80 per cent, the highest in Beijing history and the highest of all mainland cities.

China's homebuying restrictions aren't working because of the liquidity pumped in 2016 and the lag in effect. Chinese cities are tightening in response to the lagged effects even as liquidity is turning the corner. The groundwork for an overshoot has been laid. Prepare for housing downturn panic in 2H 2017 or early 2018.